Slash the Cost of Travel: Why VAT Should be Deducted from Tour Operator Services

The Tour Operators Association of Bangladesh (TOAB) has demanded the withdrawal of VAT on tour operator services due to the current situation in the tourism industry. At the same time, it was called to cancel the security mentioned in the rules of the law tour operators and tour guides and remove various anomalies.

President Towab made this claim at a press conference organized at the National Press Club on Wednesday (September 25). Rafeuzzaman.

In the press conference, Rafeuzzaman said that the new magazine regarding the registration of tour operators has mentioned some rules and conditions, which are very difficult for us to comply with. The tourism industry will suffer if the restrictions and policies mentioned in the magazine are implemented. According to the rules, in case of application for tour operator and tour guide license (registration and management), registration fee of Tk 50 thousand, bank status certificate of Tk 10 lakh and security deposit of Tk 3 lakh have to be paid. This is not possible for tour operators. By doing this, new entrepreneurs will be discouraged from developing Bangladesh’s tourism industry in the near future.

He said that for the sake of the developing tourism industry, the imposition of Musak (VAT) on the services of tour operators should be abolished. Because tour operators collect tourism elements from different sectors and create packages that create convenience and comfortable travel for tourists. They spend money on renting hotel rooms, buying transport tickets, paying restaurant bills, buying tickets to various tourist attractions and amusement parks. It even applies to other tourism services. Tour operators serve the tourists by combining all the tourism elements mentioned.

The president of Towab said that now if VAT is requested again in the combined package of tourism elements or if a tax of 15 percent is levied on the services of tour operators, the price of the package and the cost of travel will increase greatly. As a result, the entire tourism industry, especially inbound and outbound tourism, will suffer greatly. As the tourism industry is broad and multi-sector, the withdrawal of existing facilities could hinder the development of a thriving tourism industry in Bangladesh.

A number of other demands were raised at the press conference. These are – tour operators and tour guides (registration and management) license fees and renewal and reduction in bank status and collateral cancellation, recognition of export products to incoming tourism to earn foreign exchange, incentives and other facilities.

Provision of tax free/concessional facilities on road transport, boats, accommodation, various equipment etc. used for tourists. Abolish advance tax (AIT) of 10 percent on foreign exchange gross bill/payments collected from inward tour operators through banking channels, operation of tourist boats in Sundarbans throughout the year. Furthermore, it is necessary to make it easier to obtain permits for tourists in mountainous areas and to create alternative routes for traveling from Teknaf to Saint Martin.

The press conference was also attended – Towab’s first president, Abul Kalam Azad, vice president Md. Anwar Hossain, past president of TOWAB and member of the governing body of Bangladesh Tourism Board, Shiblul Azam Qureshi, Director (Media and Public Relations) of TOWAB Mohammad Yunuch and others.

AM/KSR/GKS